Northwest Says El Paso Violating GISB Rules
As El Paso Energy sets about to become the biggest and best in
practically every sector of the natural gas and electric industry,
its key gas pipeline subsidiary - El Paso Natural Gas - has
distinguished itself on another front: it holds the record at FERC
for the most complaints filed against a single company.
The latest complaint comes from Northwest Pipeline Corp., which
has accused El Paso of violating the Gas Industry Standards Board's
(GISB) standards pertaining to confirmation deadlines and
Specifically the complaint, which was filed Jan. 25, accuses El
Paso of making adjustments to confirmed amounts scheduled to flow
between the two systems "after" the confirmation deadline, creating
scheduled quantity discrepancies for shippers on Northwest.
Northwest contends El Paso's practice violates GISB standards
requiring connecting pipelines to make the necessary revisions to
confirmed amounts (either due to capacity constraints, confirming
party reductions and/or associated balancing cuts) "prior" to the
El Paso's alleged flouting of GISB standards has taken its toll
on Northwest shippers, the Williams' pipeline said. It cited a
hypothetical situation to underscore the impact of El Paso's
actions on Northwest shippers: shipper A on Northwest seeks to
transport 12,500 Dths to shipper B on El Paso; both Northwest and
El Paso send confirmations to each other for that amount prior to
the confirmation deadline, but after the deadline (when El Paso
makes adjustments for confirming party reductions and other
factors), El Paso sends Northwest another confirmation for a
reduced amount - 7,500 Dths. "El Paso's failure to comply with the
GISB standards results in a negative financial impact to shipper A
[who has] paid both its upstream supplier and Northwest based upon
the scheduled quantity of 12,500 Dths on Northwest," but who was
reimbursed by shipper B on El Paso only for 7,500 Dths.
"Essentially shipper A has 5,000 Dths of unaccounted for gas that
it cannot do anything with until the pipelines agree what the
scheduled quantity should be," Northwest told FERC.
As a temporary fix, Northwest said it agreed to adjust its
scheduled quantities to match those of El Paso's between November
1998 and June 1999. But afterward it told El Paso that it would
have to comply with the GISB standards. "As of the date of this
complaint, even though Northwest has talked with El Paso on
numerous occasions each month..., El Paso has failed to comply and
is still basing its scheduled quantities on confirmations submitted
after the GISB confirmation deadline," Northwest noted.
Northwest said it has received "numerous complaints" from its
shippers regarding the scheduled quantity discrepancies with El
Paso. It has on occasion since last June created shipper imbalances
on its own system to resolve the discrepancies, Northwest noted. In
fact, it estimated that scheduled quantity discrepancies owing to
El Paso's alleged failure to comply with GISB standards were about
110,000 Dths in December alone.
Northwest said it sought the help of the FERC Enforcement
Hotline last October, but was told it couldn't address Northwest's
problem because of the ongoing complaint that Amoco Production and
others had filed against El Paso for its capacity-allocation
practices. Even though FERC issued an order on the complaint in the
Amoco vs. El Paso case in November, the Enforcement Hotline still
refused to take up Northwest's problem, according to Northwest.
After being rebuffed first by El Paso and then by the
Enforcement Hotline, Northwest said it had no other choice but to
file its complaint. The complaint asks the Commission to order El
Paso to comply with the GISB standards by honoring the
confirmations that it sends prior to deadline. Also, it wants the
Commission to order El Paso to calculate the scheduled quantities
between the two pipeline systems dating from June 1, 1999 forward,
based upon the confirmations El Paso sent to Northwest prior to the
Northwest said it couldn't "readily quantify [the] financial
impacts or burdens" that El Paso's alleged GISB violations have
caused for its system, but it noted it has resulted in the
"devaluation of Northwest's capacity" because of the uncertainty
surrounding the delivery of gas to and receipt of gas from El Paso.
"Northwest has also had to commit personnel resources to try and
resolve this matter as well as to address its customers'
The complaint revisits a similar case where Northwest sought to
have after-the-deadline confirmations imposed on PG&E Gas
Transmission-Northwest in order to accommodate the scheduling of an
upstream Canadian pipeline that wasn't subject to the GISB
standards. Although FERC was "sympathetic" to Northwest's plight,
it held there was nothing in the GISB standards that required
PG&E GT-NW to meet Northwest's request for a later confirmation
Northwest believes that decision should apply here. "There is
nothing in the GISB standards, in the Commission's regulations or
in Northwest's tariff that requires Northwest to accommodate El
Paso's late confirmations," it said.